[Click eStock] "Samsung Bio, Strong Q2 Performance... Expectation for Q3 as Well"

Kiwoom Securities Issues 'Buy' Investment Opinion and Sets Target Price at 860,000 KRW... Closing Price on 21st at 750,000 KRW

[Asia Economy Reporter Kum Bo-ryeong] An analysis has emerged that Samsung Biologics showed strong performance in the second quarter as well due to the impact of the novel coronavirus disease (COVID-19).

According to Kiwoom Securities on the 22nd, Samsung Biologics' consolidated results for the second quarter of this year recorded sales of 307.7 billion KRW and operating profit of 81.1 billion KRW. Sales increased by 294% compared to the previous year, and operating profit turned positive. Sales and operating profit exceeded consensus estimates by 30% and 34%, respectively.

The utilization rates reflected in the second quarter were 100% for Plant 1, 100% for Plant 2, and 20% for Plant 3. This represents a significant increase in utilization compared to the first quarter's 60% for Plant 1, 100% for Plant 2, and 10% for Plant 3. Due to the continued impact of COVID-19, selling and administrative expenses decreased by 7% year-on-year to 24.9 billion KRW, contributing to improved profitability.

Strong performance is expected to continue into the third quarter. Kiwoom Securities estimated Samsung Biologics' third-quarter results at sales of 252.5 billion KRW and operating profit of 64.7 billion KRW, representing increases of 37% and 174% respectively compared to the previous year. Researcher Heo Hye-min of Kiwoom Securities explained, "Due to changes in the production schedule of Plant 1, the utilization rate is expected to decline to 65% from 100% in the previous quarter," adding, "Plants 3 is undergoing maintenance in June and July, but since the proportion of initial projects is high, the impact of regular maintenance on performance is expected to be minimal."

In the second half of the year, a specific guidance announcement regarding Plant 4 is anticipated. Additionally, Samsung Bioepis's Avastin biosimilar 'Aybintio' is expected to receive final approval in Europe in the third quarter, which is projected to bring related milestone inflows.

Kiwoom Securities gave Samsung Biologics a 'Buy' rating with a target price of 860,000 KRW. The closing price on the 21st was 750,000 KRW. Researcher Heo stated, "Samsung Biologics is the global number one company based on production capacity (capa), and due to the surge in COVID-19 related demand, it achieved the order target for Plant 3 within the first half of the year," adding, "In the short term, it benefits from the surge in demand for COVID-19 therapeutics, and in the mid to long term, sustained growth is expected due to the launch of the Alzheimer's antibody treatment Aducanumab and the patent expiration of Keytruda in 2026."

This content was produced with the assistance of AI translation services.